The Russian stock market does not have forces for growth
External background became the reason for the decline of the Russian market in the first half of the day. To the equator the trades the losses were almost eliminated, but the forces for growth in the market yet. The only positive was that the ruble indicator was able to return above the mark of 2500 points. Papers “Gazprom” again under pressure due to news about the preparation of the resolution in the us Senate against the “Nord stream-2”. In addition, it became known that France also opposed the project, but it is encouraging that Germany alone can not agree with the amendments in the energy Directive of the EU.
By 15:15 GMT Mosberg index declined 0.21% to 2504,58 p., and RTS were adjusted by 0.42% to 1195,08 p.
Receipts of “RUSAL” became more expensive by more than 3.5% on the news that the production of aluminum company rose by 1.3% in 2018, while the average sales price by 7.3%, although business clearly interfered with U.S. sanctions. However, implementation of the volume fell by 7.2%, i.e. special benefits from price increases the company has not received. Under pressure were shares of gold producers Polymetal and “Pole”, as the yellow metal came under a wave of profit-taking. The activity was quite low. The middle of trading the volume of transactions in the main section of the Moscow exchange did not even reach 15 billion rubles.
The ruble moderately weaker against other major currencies. By the middle of Moscow trading, the barrel of Brent was about 4085 rubles. One-day rate MosPrime has decreased to 7.80%, week to 7.88%, and the month remained at the level of 8.23%. CBR, as expected, did not change its key rate, keeping it at the level of 7.75%. The press release notes that “annual inflation in January 2019, consistent with the lower end of expectations of the Bank of Russia”. The contribution of the VAT increase in inflation was moderate, although inflation expectations of the population and business increased. The Central Bank stresses that to fully assess the impact of the increase in VAT will be possible not earlier than April. Risks are still biased towards preinflation.
However, the forecasts have been retained at previous levels: the growth of Russia’s GDP by the end of 2019 at 1.2% and 1.7%, inflation of 5 to 5.5%. In the first half of 2020, the Central Bank expects the return of inflation to the target level of 4%. Accordingly, “the Bank of Russia will make decisions on the key rate, assessing the adequacy of interest rate hikes in September and December 2018 for the return of annual inflation to the target in 2020, taking into account the inflation dynamics and Economics in relation to the forecast, and risks from external conditions and the reaction of financial markets.” The reaction of the ruble to the regulator’s decision was minimal. By 15:15 GMT. USD/RUB – 66,02 (+0,17%), EUR/RUB – 74,875 (+0,12%).
European indices showed minor volatility. The morning of the drawdown were quickly purchased, but a further increase in forces is not enough. The yield on the 10-year bond Germany continued to decline, reaching 0,115%. Fresh statements from the US were given to understand that the American tariff policy will remain for some time, because the meeting D. trump and XI Jinping are planned in late February. Germany reported that exports rose in December by 1.5% and imports by 1.2%. However, the markets ignored this statistic. To 15:15 (GMT.) DAX 10953,51 p. (-0,62%), CAC 40 4972,14 p. (-0,27%), FTSE 100 7077,77 p. (-0,22%).
Oil traded in positive territory after the news from Libya. The national oil company urged the conflicting parties to avoid confrontation in the field of El Sharara. 6 Feb East the government of Libya announced the capture of the field under control. However, the company’s engineers reported that the authorities in control of the pumping station. Of positive it can also be noted that production in Saudi Arabia decreased by 400 thousand. in January to 10.24 million bar. By 15:15 GMT. Brent – $61,69 (+0,10%), WTI – $52,34 (-0,57%), gold – $1315,6 (+0,11%), copper – $6221,47 (-0,23%), Nickel – $12805 (-1,39%).
The dollar index was up 0.02 percent of 96.35 p. NZD, CAD, AUD weakened from 0.1% to 0.3% relative to the U.S. currency. By 15:15 GMT. EUR/USD – $1,134 (-0,01%), GBP/USD – $1,296 (+0,08%), USD/JPY – 109,81 (+0,0%).
Futures on major U.S. indices pointed to a possible decline of 0.5% in the Dow Jones to 0.75% in the NASDAQ. Growth indices in recent times largely based on hopes that already in early March, trade relations between Washington and Beijing are clearer. However, the statement of economic adviser to the White house L. Kudlow indicates that the negotiation process could be delayed, and D. trump has no plans to meet with the leader of China. Accordingly, the negative impact of the tariff war may last until the end of the current quarter. In addition, there were rumors that D. trump intends to sign an Executive order banning the use of Chinese equipment in wireless networks United States to ensure security.
Accordingly, such a step could complicate the next round of talks scheduled for next week. The main issue for the Russian market will hold the mark of 2500 points on the index of Masuri. External negativity is enough that the support level could not resist, but that would mean that the removal of the strong could turn into a correction.